The emergence of superintelligence could necessitate some pretty dramatic changes in how the economic system is structured.
Geoffrey Hinton — the Nobel Prize-winning computer scientist widely known as the “Godfather of AI” — has been among the most vocal critics of where the technology is heading, and not just on safety grounds. In a recent interview, Hinton laid out a blunt economic argument: big tech is barrelling toward AGI without thinking through what happens to the people whose jobs it eliminates, and governments will need to tax AI agents to keep the fiscal system from collapsing.
“I think the people who run the big tech companies — the very high up people, not all of them, but a lot of them — think we are going to get to AGI. Whoever gets there first is going to have immense power and be able to make immense profits by replacing lots of jobs. And so they’re just in a big race, and they haven’t thought through what happens if they replace a huge number of jobs.”
Hinton’s concern is not abstract. Without wages, consumer demand collapses — and with it, the very market these companies are racing to dominate.
“People will not get paid. They won’t be able to buy anything. We’ll need to have universal basic income so people don’t starve. We’ll get huge social upheaval, because the gap between rich and poor will get much bigger — and all of the benefit, the big tech companies think, will go to the big tech companies. And that’s terrible.”
The solution, he argues, has to come from how governments structure the tax base in an era of automated labour. Here, Hinton points to an idea Bill Gates floated almost a decade ago:
“We somehow have to have a way of — when AI agents replace people — doing what Bill Gates has suggested recently. We have to have a way of taxing the AI agents, so there’s still a tax base.”
The logic is straightforward. Governments currently fund public services through taxes on labour. If AI agents perform the work, and no one pays taxes on that labour, the fiscal architecture breaks down. Gates’ original proposal — that companies deploying robots or AI to replace workers should be taxed on those systems much as they would on human wages — was aimed precisely at this problem: maintaining a revenue base while slowing the pace of displacement enough for society to adapt.
Hinton’s warnings have grown more pointed over time. He has previously said that unlike past technological revolutions, it is not clear to him that AI will create new jobs to replace the ones it eliminates. He has also argued that superintelligent AI is categorically different from previous automation — not a tool that makes workers more productive in some sectors, but a system capable enough to displace human labour across virtually all domains. And in a recent documentary, he said he was “fairly confident” AI will cause massive unemployment — and that we are already seeing early signs of it.
The trend data supports his concern. Microsoft has laid off thousands of workers, partly attributing the restructuring to AI-driven efficiency gains. Amazon has been even more direct, signalling that its workforce will likely shrink as AI scales. Klarna has reported that AI handles customer service work previously done by hundreds of agents. Officechai’s AI layoffs tracker currently estimates nearly 190,000 jobs have already been lost to AI.
The political and policy establishment is beginning to catch up. The EU has moved aggressively on AI regulation. Several governments have commissioned studies on UBI. And the idea of a robot or AI tax — once a thought experiment — is now a live policy discussion in multiple jurisdictions. Hinton himself has consulted with officials at 10 Downing Street, advocating for UBI as a proactive measure, not a last resort.
The deeper issue Hinton raises is one of incentive design. The companies best positioned to shape AGI development have every financial reason to accelerate it and limited structural incentive to account for the social cost. That’s not a technology problem — it’s a governance one. And unless tax policy evolves to reflect a world where AI agents generate economic value without generating taxable income, the social contract that Western economies are built on becomes very hard to sustain.